After High Tension in Nigeria in Week of Protests, A Weekend Reprieve for Negotiations

Oil Production to Halt if Talks Fail

After five days of mass protest and a widespread general strike in Nigeria, labor leaders have requested a temporary halt on demonstrations in lue of planned weekend talks with government officials. Fury over the government's decision to remove a fuel subsidy brought thousands into the streets this week; several have died in clashes with police.

BBC reports:

The main unions jointly announced there would be no mass rallies or protests over the weekend and flights would resume, enabling delegates to travel to the capital, Abuja, for talks.

The oil workers' unions had said they would cut oil production in Africa's biggest exporter, starting from Sunday.

Lamido Sanusi, governor of the Central Bank of Nigeria, who has backed the subsidy removal, told Reuters the strike was costing the economy more than $600m (PS391m) a day.

"We want to make sure that [on] Saturday and Sunday people - we - relax and get energised," the NLC head told a rally in Abuja.

If the government does not reverse its decision to the cut the subsidy over the weekend, the strike would resume, he warned.

"We are going to come out on Monday very strong. It is going to be the mother of all crowds."

Michelle Chen reports at In These Times:

The oil workers have threatened to shut down production, but suspended actions over the weekend in anticipation of talks with officials. Earlier this week the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) announced a "red alert, in preparation for total production shutdown." [...]

...the removal of the subsidy has ripped a tight band-aid off a much larger wound--the problems of governance and economic imbalance that have bled Nigerians dry over the years. The irony of Nigeria being an oil-rich and yet impoverished nation aligns with the twisted logic of global capitalism. Nigeria exports masses of crude for global consumption, but it lacks the refinery capacity to support a self-sufficient energy economy.

...many Nigerians wonder why they've yielded so little of the oil wealth that multinationals like Royal Dutch Shell have been hording with abandon. In fact, the dilemma of the fuel subsidy is driven by more than the market's invisible hand.

In an analysis of a 2009 Wikileaks cable, SR reports on "official manipulation that may have cost Nigeria billions of dollars" because "international fuel traders... overcharged the Nigerian National Petroleum Corporation (NNPC) by over $300 million." The document seems to confirm that, thanks to "sweetheart deals" threaded through huge loopholes, "the principal problem in the country is corruption and lack of transparency which will swallow whatever is saved from withdrawing the subsidy."

Nigeria, by the way, is a major supplier of the oil to the U.S. So it shouldn't surprise Americans that they haven't seen many news headlines about rebel groups sabotaging oil pipelines in recent years, or the many Nigerians killed or the communities ruined by oil spills. Even now, Washington's main concern will likely be confined to oil price spikes due to fears of market "disruption" from Nigeria while the crisis with Iran escalates.

Nonetheless, restoring fuel subsidies wouldn't remedy Nigerian society's fundamental inequities. A Brookings Institute report notes that since wealthy people consume more fuel per capita, "it is the rich not the poor who disproportionally benefit from Nigeria's fuel subsidy," and it is financially unsustainable in the long term.

Al-Jazeera reports on the potential affects of halting Nigerian oil production:

"A shutdown of oil production in Nigeria means a potential loss of at least three per cent of global oil production," said Kayode Tinouye, an analyst with Lagos-based Afrinvest.

OPEC member Nigeria produces more than two million barrels per day and is a key supplier of crude to the US and European Union.

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